How much money do you really need to retire?
It’s one of the most common questions we hear as financial advisers: “How much money do I need to retire comfortably?” The honest answer? It depends.
Your ideal retirement will be shaped by lots of moving parts – how much super you have, other savings and investments, your tax position, whether you’ll receive the Age Pension, and (most importantly) the lifestyle you want to enjoy once work becomes optional.
The good news is that with the right planning and a few smart strategies, retirement can be something to look forward to – not something to worry about.
Key points
- Based on the latest ASFA Retirement Standard, a comfortable retirement typically requires around $630,000 for singles and $730,000 for couples, assuming you receive a part Age Pension.1
- Be careful of retirement calculators as they often exclude important factors such as age pension assistance, inevitable capital expenditure requirements (over and above your standard retirement income needs) and generous return assumptions.
- A financial adviser can help you put practical strategies in place to grow your savings and reduce the risk of running out of money.
So… how much do you need?
A lot depends on what retirement looks like for you.
Some people picture overseas travel, hobbies and spoiling the grandchildren. Others are happy with a quieter pace, closer to home. That’s why headline figures like “you need $1 million to retire” can be misleading – they don’t reflect individual goals or circumstances.
In reality, many Australians retire with far less. According to the Australian Taxation Office's 2022-2023 figures, median super balances for people aged 60–64 are around:
- $219,773 for men.
- $163,218 for women.
What is clear is that after decades of hard work, no one wants to spend retirement worrying about money.
What does a “comfortable” retirement actually cost?
The Association of Superannuation Funds of Australia (ASFA) publishes a Retirement Standard that gives a helpful benchmark for typical retirement spending.1
For Australians aged 65–84 who own their home, the estimated annual costs are:
| Lifestyle | Couples (per year) | Singles (per year) |
| Comfortable | $77,375 | $54,840 |
| Modest | $51,299 | $35,503 |
A modest lifestyle is slightly better than living on the Age Pension alone.
A comfortable lifestyle allows for private health insurance, better consumer goods, regular social activities and some travel.
These figures assume retirees draw down some capital over time – which is normal.
Turning benchmarks into your retirement plan
ASFA’s numbers are a useful starting point, but the real question is: How much do you need to support the lifestyle you want?
That’s where retirement calculators and personalised advice come in. At Peak Partnership Wealth Design Solutions, we incorporate Retirement Financial Roadmapping into the advice process to factor in:
- Your super balance now and in the future: Including your income, employer contributions and any extra savings you add along the way.
- Your non-super financial and property assets: Typical retirement calculators factor in superannuation only. In reality there are multiple ways to save and build up wealth for retirement – superannuation just happens to be one of the most tax effective ways.
- Your investment strategy: Investment returns can make a big difference over time, especially if retirement is still a few years away. An accessible cash reserve is wise – fpr shorter-term capital expenditure requirements.
- Your family situation: Including your partner’s income, contributions and super balance – as well as potential future inheritances. Also consider possible financial support for children and grandchildren.
- Age Pension eligibility and part-time work : Many retirees receive a full or part Age Pension, or continue some paid work. These can significantly boost retirement income and the roadmapping process can provide clarity on how these benefits assist in capital preservation and income generation over time, for you.
Other important things to consider
There are a number of things to take into account when determining how much you need to retire.
Your age and life expectancy
When you retire – and how long you’re likely to live – matters.
If you retire around age 65, it’s reasonable to plan for 20–25 years in retirement. Based on Australian life expectancy data:2
- Men aged 65 can expect to live to around 85 years of age.
- Women aged 65 can expect to live to around 88.
Planning for longevity helps reduce the risk of running out of money later in life.
Your retirement goals
The clearer your picture of retirement, the easier it is to plan. You might like to think about:
- How often (and where) you’d like to travel.
- Whether a sea-change or tree-change is on the cards.
- Downsizing, upsizing or staying put.
- Hobbies, sport and social activities.
- Helping children or grandchildren financially.
- Future care needs – at home, in a retirement village or aged care.
Once your goals are clear, you can estimate costs, identify income sources and work out how much capital you’ll need.
Where your retirement income may come from
Most retirees draw on a mix of income sources, including:
- Superannuation
Often the cornerstone of retirement income. - Age Pension
Depending on your income and assets, you may be eligible for a full or part pension – or none at all. - Other assets and savings
Such as selling or downsizing your home, investment properties, shares, savings accounts, term deposits or inheritances.
Ways to boost your retirement savings
If your projections show a shortfall, don’t panic – there are steps you can take.
Some common strategies include:
- Consolidating superannuation accounts to reduce fees and simplify management.
- Making extra super contributions, which may also be tax-effective if you stay within contribution caps.
- Reviewing your investment options to ensure they align with your risk tolerance and time to retirement.
- Diversifying investments to help manage risk over the long term.
- Transition to Retirement Strategy to make effective use of your superannuation benefits between age 60 and 65, supplementing your employment income to either allow you to reduce your work hours OR enhance your tax-deductible super contributions.
How to avoid running out of money in retirement
Good planning doesn’t stop once you retire. Ongoing management is just as important.
Helpful strategies include:
- Creating a realistic retirement budget: Covering housing, healthcare, utilities, transport, leisure and everyday expenses.
- Diversifying your investments: A mix of asset classes can help balance growth and stability.
- Setting a withdrawal strategy: Many retirees use the 4% rule as a guide, adjusting withdrawals for inflation over time.
- Planning for healthcare costs: Including insurance and potential future medical expenses.
- Getting professional advice: A financial adviser can help bring all the pieces together and adjust your strategy as circumstances change.
Frequently asked questions
- Can I retire at age 60 with $500,000?
It may be possible, but it depends on your lifestyle, spending needs and whether you’ll receive the Age Pension. ASFA estimates a comfortable retirement at age 67 requires higher balances, assuming part pension support. Therefore, early retirement with $500,000 would likely be difficult. - How much does the average Australian retire with?
There’s no true “average.” Retirement outcomes vary widely based on lifestyle, assets, health and family circumstances. - How much do I need to withdraw from my pension each year?
Minimum withdrawals from an account-based pension start at 4% per year (under age 65) and increase as you get older, up to 14% per year at age 95 or older.
The bottom line
Association of Superannuation Funds of Australia benchmarks provide a helpful guide, but they’re only a starting point.
Getting personalised financial advice can give you a clearer picture of how your savings translate into income and help you plan for retirement with confidence. For a little inspiration, download our free Retirement Planning Guide here.
Our Financial Advisers can help you build a strategy designed around your goals, so retirement feels less uncertain and more exciting. If you'd like some straight-forward advice, clarity and direction to help you plan for your retirement, you can reach out to Pat Kelly or Amir Rodnia here to start the conversation.
Alternatively, head to our Retirement Planning page and fill out a few details – then we can get to work for you.